The MLR rebate provisions apply to fully insured commercial business, except student insurance and stop-loss products. Medicare products, such as Medicare Enhance and Medicare Supplement, are excluded as well.
The MLR percentages are calculated at the business entity, state and group size level, per federal laws and Massachusetts merged market laws. This means that a rebate position is not determined based on an individual customer’s MLR, but rather across all customers in a market segment.
The MLR compares medical services to premium. The basic formula followed is:
Clinical Services + Quality Improvement Expenses
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Earned Premium ― (Taxes and Fees)
Employers/administrators of the group health plan may have fiduciary responsibilities regarding use of this MLR rebate. For general information on the usage of this rebate, you may contact the U.S. Department of Labor (DOL) at 866-444-3272 or review their guidance on this issue, provided online here. It’s also important to consult with your legal advisor regarding the use of this rebate.
New Hampshire HPHC Insurance Company Small Group: Harvard Pilgrim will be issuing premium credits on the October invoice for active accounts. For terminated employer groups, checks will be mailed by September 30 for any rebates due on closed billing divisions.
Employer groups may choose whether to distribute MLR rebate checks to former employees. They are not required to track down former employees. If it is determined to be too burdensome or costly to pursue former employees, employers may opt instead to divide the rebates attributable to former employees among current employees. COBRA beneficiaries are considered current plan participants for this purpose.
Yes. The notice we send to enrolled subscribers whose employers are receiving a New Hampshire state and/or Federal rebate will be postmarked no later than September 30, 2024.
Yes. Per Federal notification requirements on the Medical Loss Ratio program, all subscribers – regardless of the amount of premium payments contributed – must receive notification of the rebate issued to the employer.
No. Only employers who will be receiving an MLR rebate for 2023 will be notified.
Harvard Pilgrim must comply with the MLR regulations as part of health care reform. This means issuing rebates that meet the criteria, regardless of the amount.
Activities that improve health care quality, increase the likelihood of desired health outcomes, and are grounded in evidence-based medicine are to be included in medical costs for the medical loss ratio calculation.
Quality Improvement programs are designed to achieve the following goals:
- Improve health outcomes, including an increased likelihood of desired outcomes compared to a baseline and reduced health disparities among specified populations
- Prevent hospital readmissions
- Improve patient safety and reduce medical errors, lower infection and mortality rates
- Increase wellness and promote health activities
- Enhance the use of health care data to improve quality, transparency, and outcomes
Examples of quality improvement activities include the following case and disease management and care coordination services:
- Arranging and managing transitions
- Medication and care compliance
- Programs to support shared decision-making with patients, their families, and the patient’s representatives
- Use of medical homes (as defined in the Affordable Care Act)
- Nurse-line (with some exceptions)
- Comprehensive discharge planning
- Prospective medical and drug utilization review
- Certain wellness and health promotion activities (e.g., coaching and incentives)
- Fraud and abuse programs (the lesser of expenses and recoveries)
- Certain limited health technology (HIT) expenses
Quality improvement activities must be designed to improve the quality of care received by an enrollee and be able to be objectively measured for producing verifiable results and achievements.
Activities designed primarily to control or contain costs are not to be reported as quality improvement. When calculating medical costs, the following items are not considered part of medical costs, and thus are administrative costs:
- Cost containment expenses that do not otherwise meet quality improvement criteria set forth above, which may include:
- Retrospective and concurrent utilization review
- Most fraud prevention activities (beyond those that recover incurred claims)
- Provider network contracting and management costs
- Provider credentialing
- Costs associated with calculating and administering enrollee/employee incentives
- Clinical data collection without data analysis
- Claims adjudication expenses
- Marketing expenses
- Broker commissions